When using the Data Development Analysis method for analyzing the efficiency of different firms,
it is common to put all similar DMU together for measurement in order to figure out the efficiency values of
various DMU. However, such an analysis may easily neglect the source property of an individual DMU, meaning
that the differences among various DMUs derive from different environmental backgrounds, e.g. environment
variables such as economic civilization, laws and regulations, and political backgrounds. Applying the
Metafrontier model can overcome the barriers resulting from the environment variables, and it can analyze and
measure the differences among various DMUs which have different source properties. It can also be used for
measuring the difference between each group of DMU and all DMUs. Therefore, this study adopts the DEA
method, assuming variable returns to scale to evaluate and comparatively analyze the business performance of life
insurance industries in Taiwan and Mainland China based on “BBC input orientation”. When evaluating the
business performance, the operating management echelon is affected by uncontrollable external environment
variables. Thus, this study applies the Four-Stage Data Envelopment Analysis to discuss the impact of
environment variables on business performance and re-measures the business efficiency of life insurance
industries in Taiwan and Mainland China after adjusting the input variables. The demonstration period adopted by
this study is from 2003 to 2005, and the research subject comprises 43 companies in Taiwan and Mainland China,
among which, there are 19 companies in Taiwan and 24 companies in Mainland China, and there are 129 sets of
sample data. It is assumed that the discount rate is γ (γ is set as 3% in this paper), and figured out the change of
each life insurance company in technical efficiency in the inter-period accumulative years from 2003 to 2005.